This year has witnessed what has seemed like a constantly fluctuating high price index for diesel and petrol in India.
Records from MyPetrolPrice, which maintains the official records of the diesel and petrol price revisions, state that as of 16 April 2018 in Delhi, the price of diesel was listed at Rs 65.18 per litre, reaching a five-year high.
Petrol, on the other hand, was reported at an even higher price, at Rs 74.02 per litre in the capital, on the same day.
This trend of rising petrol and diesel prices has been consistent for the past five years, with the price hike of petrol almost always being significantly greater than that of diesel.
Over time, however, the gap between the two has reduced.
What Is the Reason for This Increase?
A report by Mint suggests that one of the reasons for this price hike is that retail prices of petrol and diesel in India track the global prices of these fuels, which have witnessed a massive increase.
According to the report, the cut of supply by the OPEC and Russia led to a massive fluctuation in global oil prices, which had a heavy impact on the price of Indian crude oil.
According to data from the Petroleum Planning and Analysis Cell, the average price of a barrel of crude oil in 2016-2017 was $47.56, which rose to touch an average of $63.80 in March 2018.
The report mentions that the price has only increased since March.
The amount India spends on importing crude oil to meet its energy needs is another worrying factor in regards to the spike prices. The Mint report states that India imported 214 million tonnes of crude oil in 2016-2017.
An older report by Firstpost says that ever since the oil marketing companies decided to conduct the daily revision, prices of petrol and diesel have been soaring up. However, since the revisions happen on a more frequent basis, the subsequent price rise has been more gradual, it adds.
According to the report, the central excise duty on petrol shot up 127 percent from Rs 9.48 per litre in June 2014 to Rs 21.33 in January 2016.
In the same period, diesel saw a hike of 387 percent. While the excise on diesel stood at Rs 3.56 per litre in June 2014, it was at Rs 17.33 by January 2016.
India needs to bargain for more reasonable rates in terms of import of crude oil and rework its import strategy, as one measure to counter the price hike of these fuels to an extent, the Mint report states.
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